Bright Smart Shares Surged 60% after Being Bought by Ant Group

Ant Group has bought control of Hong Kong’s largest retail stock brokerage, as mainland China’s dominant online-payment operator stakes out a foothold in Asia’s third-largest capital market amid a resurgence of initial public offerings (IPOs) and transactions.

Ant Group agreed to pay HK$2.81 billion (US$362.2 million) for 50.55 per cent of Bright Smart Securities & Commodities Group, according to a filing late Friday night to the Hong Kong stock exchange.

Under the deal, Bright Smart chairman Yip Mow-lum has conditionally agreed to sell his stake of about 858 million shares, at HK$3.28 per share, to Wealthiness and Prosperity Holding Limited, ultimately controlled by Ant Group. The fintech giant operates the Alipay payment system used by Alibaba Group Holding, which owns South China Morning Post.

Ant Group “firmly believes in the long-term development of China’s economy and Hong Kong’s economy, and firmly believes in generating great market opportunities via the combination of technology and wealth management,” according to the filing. “With the offerer group’s product and technology innovation capabilities, the group is expected to expand its service offering to a wider age group of customers, and enhance experience for existing customers, driving further business growth.”

The offer price is a 7.5 per cent premium to the broker’s stock price of HK$3.05 before it was suspended from trading on April 23.